It called for a “full-scale banking system review” in light of the results.

“While the Government is attempting to restore competition in Australia’s banking and financial system, questions remain about how to achieve this," it said.

Deloitte said recommendations made by the Treasury in 2010, to review the financial sector’s regulatory framework, have not been taken up.

"For mutuals to provide effective competition, they need to be able to increase their market share. This will depend on their absolute access to funding, mainly deposits, the cost of funding and their access to regulatory capital and the cost of regulatory capital," it said.

Changes to the banking system – which “favoured bigger banks” - in the wake of the GFC put additional strain on mutuals, it said.

"The cost of insuring large deposits under the Guarantee Scheme was linked to credit ratings, enabling the AA-rated major banks to offer more attractive rates to depositors."

Despite these questions over the efficacy of government initiatives, non-major and mutual banks have enjoyed increased customer satisfaction lately.